Highest LVR with LMI capitalised (O/O)

Hi Mortgage Brokers and PCer's,

What's the highest LVR I can get with LMI capitalised in the marketplace at the moment?
Rates would be good too. Finder.com.au has some stats but it sounds too good to be true?

Just thinking outside the box on a concept for First Home Affordability (that I'll discuss here once I nut out the semantics)

Cheers,
Shawn

 

Cheers @Rolf Latham

Not looking to get it for myself. But what rules would I need to meet to qualify?

 

For a 95% loan with capitalised interest, there's only a limited handful of lenders that will even consider it. Those that do are extremely conservative in their assessment and the look for reasons NOT to fund the loan.

It's not a simple set of rules. You need stronger than normal serviceability, a solid savings history, clean credit, and a generally strong credit score which can be affected in numerous subtitle ways.

Generally I consider any loan over 90% as a high risk of being declined. 95% + LMI is extremely high risk.

 

To qualify for these loans you need to be perfect, basically.

Genuine savings of the 5%, although can be done non-gen if you've got strong servicing and a good reason for no gen savings - for eg, I did one for a client who had just finished paying off their wedding, and had a $20k gift from their parents to buy a house.

Established properties only at that level of lending.

 

These lenders all do 95% plus LMI but have some rules/cons:

Bankwest:

Will do up to 98% including LMI capped for owner occ only and the repayments must be P&I. Their rate isn't fantastic at 5.29% and they use QBE as their mortgage insurer (they have no DUA). QBE is much tougher from a policy, servicing and credit scoring perspective than Genworth. I think their credit scoring is the harshest out of all lenders.

Liberty:

Will do 95% plus LMI capped and they you use 2 mortgage insurers; QBE and Genworth which comes in handy as you can choose which insurer you want to use depending on the scenario. Their rates are 4.99%.

TMB:

Much like Bankwest they do 98% including LMI capped but their rate is much more competitive at 4.91%.They however use Genworth as their mortgage insurer.

Virgin Money:

They are like Liberty in that they do 95% plus LMI capped but they only use Genworth.

Jess and Pete are right though in that the application must be impeccable and strong. Dual income, PAYG, limited unsecured liabilities, good servicing/surplus, etc.

 

BankWest Auswide will do construction above 95%.

I don't know any lenders that have exceptions to 5% genuine savings...Virgin say they will accept 3%, but I'm yet to see that in practice.

It's important to compare lmi rates, rather than just interest rates on these products. There are some significant differences, as each lender negotiates their deal with the lmi provider.

 

95 + full cap rates are circa mid 4s on my lender panel - BOQ & Bankwest

95 inc of lmi (92-93 base) a lot more options and rates from 3.89.